Reeves Budget ‘tackles cost-of-living and backs Scottish industry’

Scottish families will benefit from a Budget to cut the cost-of-living, create more high skilled jobs and invest in public services, as the Chancellor reaffirmed her commitment to drive economic growth.

Chancellor announces fair deal for working families with removal of two-child benefit cap, energy bill saving and fuel duty freeze
Scottish industry backed by investments in Grangemouth, Greenock, Leith and Fife
Public services backed with extra £820 million for Scottish Government

Rachel Reeves recognised Scotland’s huge £204 billion annual contribution to the UK economy with investments in Grangemouth, Greenock, Leith and Kirkcaldy, and provided long-term certainty to the oil and gas industry to support North Sea jobs and investment.

Despite wages growing more in the first year of this government than at any point in the 2010s, the Chancellor was clear too many families are still struggling with the cost of living which is why the Budget included a range of measures to cut bills and boost pay packets.

Saying that the fairest way to help people with the cost-of-living was to cut inflation and increase wages, Reeves announced £150 off energy bills, a fuel duty freeze, and national minimum and living wage rises.

The Chancellor announced the removal of the two-child limit. 95,000 children in Scotland will benefit from this change. Funded by tackling welfare fraud and long-overdue reforms to the Motability scheme, it will result in the biggest reduction in child poverty at any Budget this century.

The Chancellor’s Budget also ensured that Scottish public services are fairly-funded, with an extra £820 million for public services in Scotland through the Barnett Formula, on top of a record settlement in June.

Secretary of State for Scotland, Douglas Alexander MP said: “This is a Budget which delivers for Scotland – raising children out of poverty and helping tackle the cost of living for working families with action on energy bills.

“Scrapping the two-child benefit cap will lift thousands of Scottish children out of poverty. Funded by raising online gambling taxes and tackling welfare fraud, it will result in the biggest reduction in child poverty at any Budget this century.

"This is a budget that we were determined to deliver and to make sure address the priorities and the needs of the people of Scotland."

Scottish Secretary @D_G_Alexander speaking after today’s Budget, on how the measures will support Scottish families. pic.twitter.com/ye8hmUlGJc
— UK Government Scotland (@UKGovScotland) November 26, 2025

“The UK Government has backed Scotland’s public services with an extra £820 million — on top of the extra annual £9.1 billion already committed at the Spending Review.

“The £14.5 million announced for Grangemouth is also vital investment in Scotland.”

Ms Reeves also announced reforms to modernise the tax system, asking those with broader shoulders to contribute more through long-overdue fair reforms.

Backing Scottish industry

£14.5 million will back Grangemouth’s transition to a hub for low carbon technologies as the UK Government cements Scotland’s place as the home of the UK’s clean energy revolution.
A further £20 million for Inchgreen near Greenock will upgrade the port’s dry dock, creating up to 1,750 jobs.
Up to £20 million will transform Kirkcaldy town centre and waterfront, including the creation of ‘Adam Smith Growth Works’, boosting local business and tourism.
£25 million will be released following the full sign-off of Forth Green Freeport – spanning Leith, Grangemouth and Fife.
To support oil and gas workers, the UK Government is introducing ‘Transitional Energy Certificates’ to manage existing North Sea fields for the entirety of their lifespan, and a new Jobs Brokerage Service – offering end-to-end career transition support.

Tackling child poverty, the cost-of-living and economic inactivity

95,000 children in Scotland will benefit from the removal of the two-child limit.
Raising the National Living Wage by 4.1% and the National Minimum Wage by 8.5% —building on April 2025 increases to the National Living Wage and National Minimum Wage that already directly benefitted 220,000 workers in Scotland.
Uprating Universal Credit Standard Allowance by 6.1%, the first ever permanent real terms increase.
Increasing the State Pension by 4.8% from April 2026, directly raising incomes for 1.1 million pensioners in Scotland.
Extending the fuel duty freeze and 5p cut, saving the average car driver £49 next year.
Unleashing talent and opportunity with a Youth Guarantee package. This will include ensuring every eligible 18-to-21-year-old who has been on Universal Credit and looking for work for 18 months in Great Britain will get a six-month paid work placement.

Public services investment

The Budget provides an extra £820 million for the Scottish Government to spend on its priorities such as education and tackling NHS waiting times— on top of the extra £9.1 billion already committed during the Spending Review.
The Scottish Government continues to receive over 20% more funding per person than equivalent UK Government spending across the rest of the UK reflecting the real costs of delivering services across Scotland’s diverse geography, from the Highlands to the central belt.

Holyrood: ‘Chaotic’ UK Budget fails to deliver for Scotland

Finance Secretary responds to Chancellor’s statement

The UK Budget “fails to deliver” for Scotland and will not move the dial on the cost of living for squeezed households, according to Holyrood’s Finance Secretary Shona Robison.

Responding to the Chancellor of the Exchequer’s statement, Ms Robison said: “This Budget has been absolute chaos from start to finish. Westminster has been consumed with leaks, briefings and out and out incompetence – with Scotland left as an afterthought and families left to pay the price.

“We needed a step change from the UK Government with investment in public services, support for jobs and industry in Scotland and serious action on energy bills. Instead, we got a chaotic mess and the increase in funding for the Scottish Government will not even cover half the cost of the employer’s national insurance contributions brought in this year.

“With UK energy bills £340 higher than the Prime Minister promised even after today’s announcement, the UK Government are not even trying to deliver on the their promises. It is insulting to see the UK Government stand up and trumpet a proposed reduction that does not even cover the increase since they came to office.

“It does not come close to meeting the Prime Minister’s pledge on energy bills – they have not even attempted to keep their promises.

“The electric vehicle tax is the wrong decision for motorists, the climate and for Scotland given its disproportionate impact on rural drivers.

“And there is no serious support for jobs and industry in Scotland. The Energy Profits Levy is to remain in place – risking thousands of jobs in Scotland and in the North East in particular. Yet again, Scotland is an afterthought.

“And while the moves on the two child cap are welcome, they are long overdue and the UK Government has been forced into this position by the Scottish Government and other campaigners. And without a simultaneous change to the benefit cap it falls well short of the bold anti-poverty measures we have been calling for from the UK Government.

“But the complete chaos around this Budget gets to the heart of the fact that we should not be leaving crucial decisions around the economy, public finances and household bills in the hands of a deeply incompetent Westminster UK government. We should take these decisions for ourselves with the fresh start of independence.”

The impact of the increase Employers National Insurance contributions on public services is forecast to cost the Scottish Government at least £2 billion over the next five years.

Responding to the UK Government’s Budget, Poverty Alliance Chief Executive Peter Kelly said: “The Chancellor’s decision to fully scrap the unjust two-child limit is the right thing to do.

“For eight years, this cruel policy has severed the link between what families across the country need and the support they are entitled to, pushing children into poverty and limiting their potential. Our children deserve better.

“Campaigners across Scotland have been unified in their demand to scrap the two-child limit and we are pleased that the UK Government has listened, sending a strong message that every child in this country matters. The end of this policy must be the starting point of reform which ensures that our social security system truly provides security.

“This decision also frees up money earmarked for the mitigation of the policy in the Scottish Budget. Coupled with the additional £820 million allocated to the Scottish Government in this UK Budget, this will allow further investment in the action we know is needed to meet our child poverty targets, including increases to the Scottish Child Payment.”

Commenting on the UK Government’s Budget response, Debbie Horne, Scotland Policy and Public Affairs Manager for Independent Age said: “The Autumn Budget was an opportunity to address pensioner poverty across the UK. However, the UK Government has sadly missed the chance to take action on an issue that now affects almost two million older people across the UK, including 160,000 pensioners in Scotland.

“While we welcome the retention of the Triple Lock, this measure alone does not go far enough for older people on the lowest incomes who are living across Scotland in cold homes and with not enough money to live on.

“We continue to call on the UK Government to increase the Warm Home Discount to ease the burden of escalating bills, to support older private renters by uprating Local Housing Allowance so no one has to make dangerous sacrifices to pay their rent, and to boost income through a comprehensive take-up strategy for entitlements, including Pension Credit.

“The absence of meaningful action to address later-life poverty will leave many older people on a low income in Scotland feeling forgotten and many will be worried about losing more of it in tax, because of the extension of the freeze on personal tax allowances to 2031, a year longer than was expected.

“We estimate that without decisive government intervention almost 190,000 pensioners in Scotland could be in poverty by 2040. Worryingly, nothing in this Budget suggests we are being steered away from this frightening outcome.”

Mary Glasgow, Chief Executive of Children First, Scotland’s national children’s charity said: “We welcome the UK Government’s decision to scrap the two-child limit as outlined in the Office for Budget Responsibility report. This is long overdue and frees up Scottish Government budget for other crucial support for children and families.

“Poverty has a devastating impact on children’s mental and physical health, development, happiness and ability to learn that can last a lifetime.

“Both governments must now work together to build on progress and meet the legal target to reduce child poverty in Scotland. Families need a stronger social security offer, for example, through the Scottish Child Payment and whole family support across Scotland to give every family the financial, practical and emotional help they need to tackle the root causes of poverty.

“Children can’t wait. The Scottish Government must use this opportunity to go further and faster in their stated mission to eradicate child poverty.”

Children First’s manifesto for the 2026 Holyrood elections calls on the next Scottish Government to deliver a comprehensive offer of whole family support to tackle child poverty and give every family the emotional, practical and financial support they need.

Read the manifesto here: 2026 Holyrood Election Manifesto | Children First

Helen Barnard, director of policy at Trussell, said: “Trussell is delighted to see the Chancellor take this bold step which will protect hundreds of thousands of children from growing up facing hunger and hardship. She has listened to the families and food banks across the UK who have been imploring her to act.

“The cruel two-child limit has driven countless families into hardship, forced to turn to food banks to survive. Today’s announcement of its full and swift removal will help ensure all our children have the best possible start in life, ease pressure on public services, and help to boost our economy.

“This government came to power promising to end the need for emergency food and reduce child poverty. Removing the two-child limit will make a vital and significant contribution towards delivering on those manifesto commitments.

“This move will pull 470,000 children out of severe hunger and hardship by 2027 and ease pressure on food banks throughout the UK.

“The government has built on positive steps in strengthening support for people facing severe hunger and hardship. But this cannot be the end. Food bank need remains well above levels five years ago and many people are still struggling to afford the essentials.

“We need more bold choices to transform lives across our communities.”

The End Child Poverty Coalition commented:

Implications for Scotland of abolishing the two-child limit

FRASER OF ALLANDER BUDGET PREVIEW

One of the key decisions that UK Ministers will be making ahead of Rachel Reeves announcing the Budget later this month is what to do about the two-child limit (write Fraser of Allander Institute’s SPENCER THOMPSON and HANNAH RANDOLPH).

This policy, which limits Universal Credit to the first two children in a family, has been widely criticised for driving up child poverty rates. And given that the UK Government has pledged to reduce child poverty, with the publication of its child poverty strategy expected sometime around the Budget, the pressure is on to abolish the policy.

The Scottish Government has committed to mitigate the two-child limit by introducing a new benefit, the Two-Child Limit Payment (TCLP). If the two-child limit is abolished, this payment would no longer be needed, freeing up resource for the Scottish Government. The First Minister has pledged that the savings would be spent on additional measures to tackle child poverty, which he has stated is the Scottish Government’s top priority.

How much would the Scottish Government save?

The Scottish Fiscal Commission has forecast the TCLP will cost £155m in 2026-27. This represents the amount that the Scottish Government will directly save if the two-child limit is abolished.

There would however be some offsetting costs to the Scottish Government, coming through two main channels. First, removing the two-child limit would push more families onto the Benefit Cap – unless this was also abolished – which the Scottish Government mitigates through Discretionary Housing Payments.

And second, it would bring more families onto Universal Credit, namely those whose incomes are just too high to be entitled with the two-child limit in place.

These families would in turn become eligible for devolved benefits that are linked to receipt of Universal Credit, including the Scottish Child Payment, raising spend on these benefits.

We estimate that these spillovers would amount to around £34m in 2026-27.

Whether this cost is met from within the £155m pot or counted separately is a political question. The fiscal context, which will become even more challenging if the UK Government chooses to raise income tax in the rest of the UK, may encourage the former choice. But this would likely be seen by campaigners as penny pinching at a time when urgent, ambitious action is needed to tackle child poverty.

Even with the two-child limit abolished, we would still be a long way off meeting the statutory child poverty targets in 2030 – and these are approaching quickly, with the final Delivery Plan due in March.

How could the savings be spent?

If the spillover costs from the abolition of the two-child limit (£34m) were funded from within the TCLP budget (£155m), that would leave £121m to be spent on other policies. We have modelled the child poverty impacts of five illustrative policy options, all of which we estimate will cost about this much in 2026-27 assuming no changes in behaviour or administrative costs. Clearly, a £155m policy could go further than a £121m one, so this represents a conservative scenario.

Impacts of policy options on relative child poverty after housing costs, 2026-27

Option	Raising the Scottish Child Payment to…	…and…	… would reduce child poverty by about…
1	£35	–	1ppt
2	£31	extending Scottish Child Payment from children under 16 to include dependents aged 16-19	1ppt
3	£34	increasing Best Start Grants and Best Start Foods by the same proportion	1ppt
4	£30	extending universal Free School Meals from P1-P5 to include P6-P7	–
5	£34	increasing the maximum discount on water and sewerage charges from 35% to 100% for families with children	1ppt

Source: FAI modelling using UKMOD.
Notes: Dash indicates that impact is too small to report. Scottish Child Payment is currently projected to be about £28 per child per week in 2026/27. Free School Meals count as income for purposes of measuring poverty. Technical details of modelling available on request.

The impacts of these policies would be over and above the impacts of the two-child limit being abolished, which we estimate to be around 1 percentage point in 2026-27. All else equal, each of the options would reduce relative child poverty after housing costs by a further 1 percentage point in 2026-27, representing an additional 10,000 children who would be kept out of poverty.

The exception is Option 4: extending universal Free School Meals to all primary school students would not have a measurable impact on aggregate child poverty levels, even when coupled with an increase to Scottish Child Payment of around £2 per child per week.

Although most of the policies are similar in terms of their aggregate impacts, under the surface there are some important differences:

Option 1 is the simplest, but does involve steepening the so-called ‘cliff edge’, whereby households lose their entire Scottish Child Payment award if their incomes increase beyond the point at which they are entitled to Universal Credit – which could incentivise them to forego opportunities to earn more. This option also increases Scottish Child Payment for recipients who are not in poverty, including those kept out of poverty by the payment at its current rate.
Option 2 is arguably preferrable in these respects, since it extends Scottish Child Payment to families who are not currently eligible while also benefitting many multi-child families who currently are, with the overall cliff edge not steepening as much. However, it does favour older children, when families with young children have been identified as a priority group.
Option 3 targets younger children specifically – Best Start Foods is available until the child turns three, while Best Start Grants are paid to children at various points until the child starts school. This option would also channel some of the TCLP savings into one-off grants as opposed to recurring payments, which may be less distortionary when it comes to work incentives even though they have similar eligibility criteria as the Scottish Child Payment. By the same token, their one-off, targeted nature limits their direct impacts on overall levels of child poverty.
Option 4 removes a cliff edge of sorts in the form of the means test for Free School Meals that applies to children in Primary 6 and 7, who are typically between 10 and 11 years old. Although this policy would benefit some households that lie just above current eligibility, it would primarily benefit those with higher incomes. On the other hand, the distributional impacts would depend on take-up, and there could be wider benefits such as a reduction in stigma.
Finally, Option 5 is unique in featuring a gradient across households – both because discounts on water and sewerage charges are proportionately linked to Council Tax Reduction, which tapers with income, and because these charges themselves vary by council tax band. Other changes to Council Tax Reduction would also be possible, but these will tend to extend entitlement to higher-income households rather than just benefitting current recipients, most of whom already receive a 100% reduction.

These are by no means the only options available, but they highlight some of the factors that the Scottish Government will need to weigh up when reallocating the TCLP budget, along with the potential impacts of doing so, in a scenario where the two-child limit is abolished.

Time will tell

Whether or not that that scenario will transpire remains unclear. It is possible that the UK Government will take an intermediate approach by relaxing the two-child limit in some way without abolishing it entirely – for example by exempting certain groups, moving to a three-child limit, or introducing a taper.

Mitigating the remainder of the limit would cost less than the planned TCLP – meaning there would still be some savings – but may require more time to be designed and implemented. It is also possible that the Budget will include a commitment to eventually abolish the two-child limit, but not in the coming year, meaning the TCLP would be needed temporarily.

For now, all eyes are on Rachel Reeves – but the focus will quickly turn to the Scottish Government. Keep an eye on our website and social media for more analysis of the UK and Scottish Budgets over the next few months!

TOMORROW: SCOTLAND DEMANDS BETTER

TOMORROW, Saturday 25th October, Child Poverty Action Group – alongside other members of the End Child Poverty Coalition – will be joining charities, community organisations, faith groups, trade unions and many more in a march from Holyrood to the Meadows in Edinburgh (writes CPAG Scotland’s MARIA MARSHALL).

#ScotlandDemandsBetter has been organised to give organisations and individuals in Scotland an opportunity to make their voices heard and demand that politicians make the change needed so that every household in Scotland can thrive.

Signs we are on the right track…

In a lot of ways, we have seen progress to tackle child poverty in the past several years, at least here in Scotland.

The passing of the Child Poverty (Scotland) Act in 2017 was a watershed moment. Following the abandoning of child poverty targets by the UK Government in 2015, the Child Poverty (Scotland) Act ( unanimously backed by all of Holyrood’s parties) set targets for child poverty reduction and requirements such as a tackling child poverty delivery plan to be published by the Scottish Government every four years.

The result of this cross-government, cross-party effort in Scotland has been to sharpen the minds of those who hold the power and drive real and tangible progress for families.

Since then, we have seen the introduction and expansion of the Scottish child payment (SCP), first introduced in February 2021 and now worth £27.15 a week for every eligible child under 16.

This has made a real difference for many low income families.

Along with other members of End Child Poverty and the Scotland Demands Better movement we are now calling for immediate and sustained increases in its value so that it reaches £55 per week by the end of the next parliament. Investing further in the Scottish child payment is the most direct and cost-effective tool available to the Scottish government to further reduce child poverty.

SCP is one of a suite of policy interventions in the first two delivery plans including; Best Start Foods and Best Start grant (replacing Healthy Start and Sure Start in the UK), an expanded offer of 1,140 hours of funded early learning and childcare, increased focus on parental employability support and the expansion of universal free school meals in primary schools (despite subsequent backtracking on promises for universal provision for P6-7 pupils too…)

Of all the interventions taken, it is the increased investment in social security in Scotland that is behind the diverging trend confirmed in the latest child poverty statistics which saw child poverty in Scotland fall by four percentage points, while rising (once again) UK-wide. Steps in the right direction for sure.

We’ve come some way, but not far enough

So on the one hand, we have seen some real success. In December last year, research commissioned by CPAG on the costs of raising a child, found that the gap between costs and incomes for families in Scotland was narrower than the rest of the UK. However, this same research found that Scotland’s lowest-income families are still left with less than half the income they need for a minimum socially acceptable standard of living.

Despite showing that progress had been made, this year’s child poverty statistics also confirmed that over one in five children in Scotland are still growing up in poverty. For those children, for all children, we are demanding better.

We can shout about the progress made, but for families living on the sharp end of the cost of living crisis, this will ring hollow. Summer holidays this year too often brought more stress and anxiety for Scottish parents than opportunities to learn and play. Like Hope, parent and participant in the Changing Realities project, who wrote in July:

“Already it has been a bit stressful. The kids are constantly hungry and “bored” then hungry again. Which means more food shopping. I can’t afford summer clubs/camps (tennis, football, multi sports, water sports etc) as they are coming in at around £40 a day and some of them state you have to bring your own packed lunches … I also am embarrassed to take the kids to a food bank this year. So if my oldest boy is in I’ll get him to watch my youngest and tell them “I’m going shopping.”

Too many families are being denied the security and opportunity to thrive that we all deserve. But looking to the future, there should be reason to feel hope.

Standing at the crossroads

We now have two governments, UK and Scotland, who have made a commitment to tackling child poverty. Campaigners are anxiously awaiting the UK child poverty strategy due to be published this Autumn.

Next year’s elections in Scotland also provide an opportunity for all parties, MSPs and candidates to commit to building on the progress made and delivering a better future for all of Scotland’s children.

In theory, we are at the cusp of a real opportunity for making progress on tackling child poverty. But we can also risk losing our way…

Will we build on the progress made in Scotland to meet the 2030 targets? Will the UK Government pull the levers in their power such as scrapping the two-child limit and benefit cap to move us in the right direction together?

Or will we see a stalling in Scotland, resting on existing progress and unable to keep up with the rising costs squeezing low-income families? Will the UK strategy fail to tackle the true drivers of rising child poverty such as the slashing of social security support in the past 15 years?

Walking with hope

In May last year, parents from the Changing Realities project launched their own campaign ‘Hope Starts Here’ with the aim to change the narrative on the progress we need to see by shifting the focus on the potential that all children have.

One parent, Faith, expressed that: “I hope that my children will be able to have endless possibilities of what and who they want to become in the future when they grow up. There is a big world waiting out there for them.”

Faith’s words encapsulate why members of the End Child Poverty coalition will be marching together to demand better for our children. All children should have endless possibilities of what and who they want to be when they grow up.

Better is possible. There is already ambition across the political spectrum to tackle child poverty. We now need to see the two-child limit and benefit cap scrapped at UK level, and in Scotland we need all parties to set out a clear path that will deliver year on year progress towards the 2030 targets, so that every child in Scotland can have the best possible start in life.

If you’re in Edinburgh on Saturday, please join us.

More funding to tackle child poverty

Increased support for local initiatives

Projects aimed at tackling child poverty across the country will receive increased, multi-year funding thanks to a boost from the Scottish Government.

Successful applicants to the third round of the Child Poverty Practice Accelerator Fund, now worth more than £1.8 million, will receive grants of up to £100,000 over two years to improve local services.

The Scottish Government has already invested over £1.4 million to support 21 projects across Scotland over the first two rounds of the fund, having launched in 2023.

Previous grants have been used to improve the use of data to identify families who need support, to improve access to financial advice services, and to support parents to engage with employability services.

The fund sits alongside other innovative measures, such as the Five Family Payments, including the Scottish Child Payment, which are helping to reduce child poverty in Scotland.

Social Justice Secretary Shirley-Anne Somerville said: “Eradicating child poverty, supporting families and giving children the best start in life are the driving principles of this government.

“That’s why, alongside a range of measures, we have reopened this fund to help local authorities and health boards to go further, aiding the collective effort to confine child poverty to history.

“Work through the fund has previously helped maximise income and to tackle household debt, which is vital to easing the strains felt by households as the cost of living rises, and I look forward to receiving many innovative proposals.

“Our collective measures mean that Scotland remains the only part of the UK where child poverty levels are falling.

“We should recognise that progress, but we must not forget that one child living in poverty is one too many. We are laser-focussed on addressing the challenges faced by households across the country, and this fund is another step towards eradicating child poverty.”

Transformation Project Manager at North Ayrshire Council Tracy Simpson said: “The fund supported the council on our journey towards implementing a North Ayrshire Single Shared Assessment model.

“Being involved in the fund’s project network provided an opportunity to share learning and experiences across local authorities and ideas from others helped shape work that could be replicated at North Ayrshire.

“Expanding our network and having access to key contacts has helped us to raise awareness at a government level about the key challenges faced around data reuse to maximise customer entitlements and target unmet need across the public sector. The support provided from the Scottish Government was exceptional.”

The Child Poverty Practice Accelerator Fund strengthens the collaborative efforts to tackle child poverty between the Scottish Government and local partners. Elsewhere, through the Fairer Futures Partnerships (FFPs), the Scottish Government is working with local authorities to test and improve services to better help families living in poverty.

Last month, the First Minister announced an extension to the FFP programme with support now available in 16 regions.

This included expanding to Dumfries & Galloway, Edinburgh, South Ayrshire, West Dunbartonshire and West Lothian, meeting a Programme for Government commitment to work to identify further adopters in addition to three new partnerships in Fife, North Lanarkshire and Shetland this year.

Eradicating child poverty is the Scottish Government’s driving mission.

As Challenge Poverty Week begins, First Minister @johnswinney highlighted action we're taking to benefit families and how we can go further to help more people access the support they need. pic.twitter.com/eRJJrnMBSG
— First Minister (@ScotGovFM) October 6, 2025

The proportion of Scottish children living in absolute poverty has reached its lowest level in 30 years and the latest figures (for 2023-24) show that the rates of both relative and absolute child poverty in Scotland were 9 percentage points lower than the UK average.

Applications are open until Friday 21 November 2025.

Swinney: Eradicating child poverty “a truly national mission”

First Minister leads summit with front-line practitioners

First Minister John Swinney has described his priority of eradicating child poverty in Scotland as “a truly national mission” and our “moral imperative” ahead of an event in Glasgow.

Addressing over 500 delegates from across the public and third sectors, the First Minister also announced that more families across Scotland are set to benefit from investment in innovative projects that join up local services, making it easier for people to access the support they need.

Through the Fairer Futures Partnerships (FFP), the Scottish Government is collaborating with local councils to test and improve services to better help families living in poverty. These partnerships bring together a range of services, across childcare, education, health and social care, housing, employment and beyond, to provide whole family support.

Building on the success in three pathfinder areas, and eight existing FFPs, the Scottish Government is now expanding these partnerships into five new areas – Dumfries & Galloway, Edinburgh, South Ayrshire, West Dunbartonshire and West Lothian.

Speaking ahead of the event, the First Minister said: “When I became First Minister, I said that I will pursue priorities that will make Scotland the best our country can be, and the most important priority that I have pursued in Government has been that of eradicating child poverty.

“The cornerstone of our approach is investment in more dignified and generous social security support, through game-changing measures like the Scottish Child Payment, and ending the UK Government’s two-child limit.

“However, there are still far too many children growing up hungry, or cold, and unable to reach their full potential. In a country as wealthy as Scotland, that is unacceptable.

“It is my firm believe that nothing that is wrong with Scotland can’t be fixed by what is right in Scotland, and whole family support – which is about redesigning the system, both for the people who deliver vital services and for the people who rely on them – is key to that.

“And it is already happening, right now, in areas across Scotland, where local authorities and their partners are already testing new and innovative ways of working together – reshaping and redesigning services in close partnership with local communities. But we need to see this in all areas of Scotland.

“Through the Fairer Futures Partnerships, backed by £4 million investment this year, we are working hand-in-hand with local authorities, communities, and the third sector to deliver real, lasting change. And we are now rolling this out into even more areas of Scotland, allowing us to test and scale up what works, ensuring every child in Scotland can thrive.

“I want to shine a light on the good work that is happening, encourage knowledge-sharing, hear directly from people about what is working well and how the Government can support them to make whole family support a reality in all areas of the country.

“It is our truly national mission to ensure that no child in Scotland grows up in poverty. It is everybody’s business, and our moral imperative – because there is no greater long-term investment we can make in our future and our success as a nation.”

The five newly-announced Fairer Futures Partnerships (FFPs) build on the work of: the Social Innovation Partnership since 2016; the three original partnership projects in Dundee, Glasgow and Clackmannanshire; the five FFPs in Aberdeen City, East Ayrshire, Inverclyde, North Ayrshire and Perth & Kinross announced in the 2024-25 Programme for Government; and the further three in Fife, North Lanarkshire and Shetland announced in the 2025-26 Programme for Government. 

Alongside this, Scottish Government is making up to £1.12 million “Adopt and Adapt” funding available to local authorities not currently engaged in Fairer Futures Partnerships. This funding is provided to support councils’ efforts to access and engage with the learning and evaluation programme, and to embed relevant learning in their local work on child poverty.

fairer-futures-partnerships-evaluation-strategy Download

STV Children’s Appeal Ignite Fund support for local charities

SCRAN ACADEMY and THE YARD to receive a share of over £1m to help put a stop to child poverty in Scotland

Three Edinburgh children’s charities have been named among 11 Scottish organisations as partners of STV Children’s Appeal’s new Ignite Fund.

Each charity will receive a share of £1 million this year through the funding programme created to deliver ongoing financial and non-financial support to children, young people and family charities in Scotland.

Since its inception in 2011, STV Children’s Appeal has invested in long-term projects with charitable organisations. The Ignite Fund, a key part of the Appeal, will continue to provide sustained, multi-year financial and development aid to charities across the country to help break the cycle of child poverty in Scotland.

The Edinburgh charities which will receive funding are:

Scran Academy which is a catering social enterprise empowering young people to realise their full potential through transformational education and employability programmes;
based in Edinburgh and operating Scotland wide is Place2Be & Youth Scotland which equips youth workers and Peer Leaders with the tools to provide vital support for young people’s mental health and wellbeing, and
The Yard which has a play and family support centre for disabled children in Edinburgh as well as other cities across Scotland.

These charities were chosen for their commitment to offering tangible, scalable solutions which tackle the root causes of poverty – an ethos shared by the Ignite Fund.

The STV Children’s Appeal will work closely with Ignite partners to identify goals, needs, and opportunities for growth, aiming to drive both immediate improvements and lasting systemic change.

The initiative will include the launch of the Ignite Academy which will offer charity partners access to STV’s in-house expertise (such as marketing, communications, and creative), while fostering a peer network for knowledge-sharing and collaboration.

Natalie Wright, Head of STV Children’s Appeal, said: “At STV Children’s Appeal, we have always focused on ensuring the funding we give is well thought through and with a purpose, which is exactly what we are doing with The Ignite Fund.

“Our experience shows that a sustained approach to our partnerships gives real results which make an immediate and lasting impact to those who need it most.

“We’re excited to welcome Place2Be back to continue our successful partnership, and to have The Yard and Scran Academy on board for the beginning of a fruitful relationship which will change lives.”

Scran Academy is in its first year of partnership with STV Children’s Appeal and provides meaningful youth-led education, employment and skills-building programmes through innovative catering social enterprises, helping young people realise their full potential.

The STV Children’s Appeal’s Ignite Fund will allow Scran Academy to reach younger age groups earlier, generate systemic change, and build capacity by opening new youth-led cafes, including one in the Royal Hospital for Children and Young People, opening this summer.

Scran Academy Founder and Chair, John Loughton said: “This is the largest single investment in Scran, and we couldn’t be more thrilled. This funding will create hundreds of new employment and training opportunities for young people across Lothian.

“Our team will keep driving lifechanging impact across education, enterprise and community development, led by the communities we serve. As Founder, I know at Scran we trust and believe that folk facing poverty are the solutions to their own lives – we see what they can do, not what they don’t have.

“Thank you to the STV Children’s Appeal, one of Scotland’s most forward-looking funders. We’re ready to get to work and quite literally, Cater for the Future.”

The Yard, which has a play and family support centre in Edinburgh, is dedicated to improving the lives of disabled children, young people, and their families across Scotland. Their mission is to create thriving, supportive communities that enhance the well-being of families facing the challenges of disability.

The organisation will be supported by the Ignite Fund for the first time as it sets out on its five-year strategy to expand its impact, improve inclusion, and ensure sustainable growth.

Celine Sinclair, CEO at the Yard, said: “The Ignite Fund partnership couldn’t have come at a better time for us at The Yard.

“Our Edinburgh based play and education centre is a thriving community space which makes a huge difference to the families we work with, and this new funding and support will help us grow and develop our team which will ultimately let us continue expanding across Scotland and helping more families than ever.”

Place2Be, a children’s mental health charity providing counselling and support to UK schools. In partnership with Youth Scotland, the national charity for community-based youth work development, they are setting out to equip community-based youth workers with the essential knowledge and understanding of young people’s mental health, and the skills and confidence to better support their emotional needs.

Michele Meehan, Head of Youth Work Programmes at Youth Scotland said: “The Ignite fund has allowed Place2Be and Youth Scotland to work together to create a suite of programmes and resources for youth workers in the community which are needed to support young people with the issues they currently face.”

Find out how you can get involved: stv.tv/appeal

MSPs seek views on effective social security spending

MSPs on Holyrood’s Social Justice and Social Security Committee are seeking views on the positive and negative aspects of growing social security spend in Scotland.

The Committee has launched a call for views to help inform its scrutiny of next year’s Scottish Budget. The devolution of social security payments started in 2016 and since then the Scottish Government has introduced policies that are specific to Scotland, like the Scottish Child Payment and greater funding for Adult Disability Payment and carer benefits.

A key theme in the Committee’s inquiry will be the interplay between different policy decisions taken by the UK and Scottish Governments.

The choices that the Scottish Government has made have meant that this year the Scottish Government is spending £1.2 billion more on social security policies than it gets in funding for social security from the UK Government.

Any changes to disability payments by the UK Government could change the funding the Scottish Government receives. In this context, the Committee is asking how much the Scottish Government’s ability to manage the devolved social security budget is affected by UK Government policy choices.

The Committee also wants to hear people’s views on the most cost-effective ways to reduce child poverty and the advantages and disadvantages of universal benefits compared to those targeted at low-income households.

Collette Stevenson MSP, Convener of the Social Justice and Social Security Committee, said: “The Scottish Government has invested in social security with the aim of tackling specific challenges in our society. As we look towards the next Scottish Budget, we would like to hear your views on the effectiveness of this approach.

“We’re keen to hear from people who receive social security benefits, and organisations who provide advice or support, government agencies and public bodies and anyone with expertise or interest in social security spending and public finances.

“Our call for views is open for responses until 17 August 2025. We then plan to take evidence on the issues raised over the autumn.”

Find out more about the Committee’s inquiry into future social security spending

Share your views on future social security spending

Targeting funding at frontline services

Financial strategy and action plan published

Savings rising to £2.6 billion in 2029-30 will ensure funding can be targeted at frontline services such as the NHS, social security, action to eradicate child poverty and other priorities.

Under the five-year Medium Term Financial Strategy and Fiscal Sustainability Delivery Plan the Scottish Government will:

increase value for public money, with affordable and sustainable investment plans set out through a Scottish Spending Review in December
improve efficiencies and productivity across the public sector by using more technology and automation while improving collaboration between public bodies
reform public services, doing more with available resources and prioritising people with the greatest need
reduce the public sector workforce by an average of 0.5% every year until 2030 while protecting frontline services
invest in preventative measures to reduce demand on services such as health, social care and justice

The strategy and action plan also include measures to support sustainable, inclusive economic growth and ensure a strategic approach to tax policy that considers longer term impacts and competitiveness.

Finance Secretary Shona Robison said: ““With the world facing profound economic uncertainty this Medium Term Financial Strategy is being published in deeply challenging circumstances. Those challenges have been exacerbated by the actions of the UK Government, whose decisions continue to have serious consequences for the delivery of our public services.

“Managing the impact of Westminster austerity is all too familiar. In spite of this we continue to invest in the people of Scotland, supporting a better paid public sector, delivering high-quality public services and providing welfare support that is not available in other parts of the UK. And we have done this while delivering a balanced budget every single year.

“Fiscal sustainability is about more than balancing the books – it’s about delivering value, driving reform and making strategic choices that support long-term growth. By focusing on efficient public spending, modernising services, growing our economy and taking a strategic approach to tax, we can build a stronger, fairer Scotland.”

Medium Term Financial Strategy 2025

Fiscal Sustainability Delivery Plan 2025

SCOTLAND TO SCRAP THE CAP

Scottish Government scrapping the two child limit to help end child poverty

The Scottish Government will effectively scrap the impact of the two-child limit from 2^nd March 2026, Social Justice Secretary Shirley-Anne Somerville has confirmed.

On a visit to Busy Bees Bellfield parent and toddler group in Portobello, Ms Somerville said the introduction of the Two Child Limit Payment will mean 20,000 fewer children will be living in relative poverty in 2026-27, according to Scottish Government modelling.

Speaking ahead of a statement to parliament on the publication of the annual report on Best Start, Bright Futures, the Scottish Government’s child poverty strategy, Ms Somerville said: “The Scottish Government has consistently called on the UK Government to end the two-child cap.

“Reports suggest that they are looking at the impact it is having. But the evidence is clear and families and Scotland can’t wait any longer for the UK Government to make up its mind to do the right thing and scrap the cap once and for all.

“The Two Child Limit Payment will begin accepting applications in March next year. At less than 15 months from when we announced this in the Scottish budget, this will be the fastest that a Scottish social security benefit has been delivered.

“This builds upon the considerable action we have taken in Scotland, including delivering unparalleled financial support through our Scottish Child Payment, investing to clear school meal debts, and continuing to support almost 10,000 children by mitigating the UK Government’s Benefit Cap as fully as possible.

“However, austerity decisions taken by the UK Government are holding back Scotland’s progress. Modelling published in March makes clear that if the UK Government act decisively on child poverty, they could help to take an estimated 100,000 children out of poverty this year.”

The two child limit cap was introduced by the UK Conservative Government in 2017. Since their Westminster victory last year Keir Starmer’s Labour government has refused to scrap the cap.